With the new IR35 rules for private sector companies now less than a week away, business owners will no doubt be wanting to do some last-minute research on the latest rules relating to the off-payroll rules, to make sure they are fully up-to-date when the changes come in.
While the gist of the changes is widely known, the last few weeks have brought some important clarifications, updates and amendments from HMRC, which it will be vital for business owners to be aware of as the new regime begins.
In February, HMRC issued some updates regarding how it would monitor compliance. In the wake of rising numbers of disguised remuneration schemes and umbrella companies adopting non-compliant policies, HMRC announced that it will increase scrutiny of tax avoidance schemes.
The Treasury said it will establish a specialist IR35 compliance body to help with the implementation of the new rules and to take action against non-compliance where it is found to occur.
Last month, the Treasury issued some final amendments as part of the Spring Budget. Firstly, seeking to clarify the term “intermediary”, HMRC confirmed that this does not refer to umbrella companies or other third-party companies through which a contractor provides services.
Secondly, HMRC announced the introduction of Targeted Anti-Avoidance Rules (TAAR), which will seek to combat tax avoidance and could also be used against schemes like disguised remuneration.
The last of March’s announcements was a major one, namely the disclosure that liability for IR35 can be transferred between different parties in a supply chain. This does not mean that contractors could be made liable, but that members of supply chains, even if they aren’t the fee-payer, could become liable should they file incorrect information.
Author: Steven English